Transpacific Industries Group (TPI)

Credit Suisse has maintained its “neutral" rating on
Transpacific Industries Group
but decreased its target price, following the company’s downgrade for full-year forecasts.

The company, which provides recycling and industrial services and waste management, indicated earnings before interest, tax, depreciation and amortisation would be about $420 million to $440 million for the full year to June. Credit Suisse expected earnings of about $440 million.

Analysts suggest underlying operational conditions are not improving as quickly as first thought, suggesting an earnings downgrade for financial year 2012 of about 4.7 per cent, which results in a decrease to earnings per share forecasts for the same period of about 11.9 per cent.

Analysts caution the valuation of Transpacific’s high-quality asset base is jeopardised by excessive leverage in the short term. Target price has been decreased to $1.00 from $1.38 accordingly.